SIP Calculator
Calculate returns on your Systematic Investment Plan (SIP). See how monthly investments grow with compounding over time.
Maturity Amount
โน0
How to Use the SIP Calculator
Enter your monthly SIP amount, expected annual return, and investment period. Optionally enter a target corpus to see what monthly SIP you need to reach it. The calculator instantly shows maturity value, total invested, and wealth gained.
SIP Future Value Formula
FV = PMT ร [((1 + r)โฟ โ 1) / r] ร (1 + r) Where: PMT = monthly investment, r = monthly rate (annual รท 12), n = months
Why SIP Works โ The Power of Compounding
Compounding means you earn returns on your returns. A โน5,000/month SIP at 12% for 20 years turns โน12 lakh of total investment into over โน49 lakh โ more than 4ร your money. The longer the horizon, the more dramatic the effect.
Frequently Asked Questions
- A Systematic Investment Plan (SIP) lets you invest a fixed amount in a mutual fund at regular intervals (usually monthly). Instead of investing a lump sum, SIP averages out your purchase cost through rupee-cost averaging and harnesses the power of compounding over time.
- SIP future value = PMT ร [((1 + r)โฟ โ 1) / r] ร (1 + r), where PMT is the monthly investment, r is the monthly return rate (annual rate รท 12), and n is the total number of months. Our calculator applies this formula instantly.
- To accumulate โน1 crore in 15 years at 12% annual return, you need about โน2,002/month. Over 10 years at 12%, you need ~โน4,347/month. The earlier you start, the smaller the monthly SIP needed โ time is the most powerful variable.
- SIP is better for salaried investors with regular income since it averages out market volatility (rupee-cost averaging). Lump sum can give higher returns if invested at market lows. For most people, SIP reduces risk and builds discipline, making it the preferred choice.
- 1. Choose a mutual fund (equity, debt, or hybrid) based on your goal. 2. Complete KYC verification. 3. Register on the fund's website or an app like Zerodha Coin, Groww, or Paytm Money. 4. Set up auto-debit mandate. 5. SIP deductions happen automatically each month.
- Start with an amount you can sustain โ even โน500/month builds a habit. The ideal amount depends on your financial goal. A common guideline is to invest 20% of your monthly income via SIP. Use our calculator to work backward from your target corpus.
- Rearrange the SIP formula: PMT = FV ร r / [((1 + r)โฟ โ 1) ร (1 + r)]. Enter your target amount, expected return, and investment horizon to find the required monthly SIP. Our calculator shows this in the 'Goal SIP' section above.
- XIRR (Extended Internal Rate of Return) is the most accurate way to measure SIP returns because it accounts for the exact timing of each investment. Unlike simple annualized returns, XIRR reflects that each SIP instalment was invested for a different duration, giving the true compound annual growth rate.
- No. SIP returns in equity mutual funds are market-linked and not guaranteed. Historical average returns for diversified equity funds range from 10โ15% per annum over long periods, but past performance doesn't guarantee future results. Debt fund SIPs have more stable but lower returns.
- Use the reverse SIP formula: Monthly SIP = Target Amount ร r / [((1 + r)โฟ โ 1) ร (1 + r)]. For example, to accumulate โน50 lakh in 20 years at 12% return, you need just โน502/month. Start early โ doubling the time roughly quarters the required SIP amount.